Using New Markets Tax Credits to Rejuvenate a Brownfield

On 1,600 acres, the abandoned Bethlehem Plant of the Bethlehem Steel Corporation is the nation's largest brownfield development, located in a severely distressed area in Bethlehem, PA. ArtsQuest, an organization dedicated to arts and culture in the Lehigh Valley, is partnering with the City of Bethlehem to construct an arts, culture and education campus on 4.5 acres within the brownfield. ArtsQuest approached NFF to supply a $10 million New Markets Tax Credits (NMTC) allocation, as part of the overall NMTC transaction structure for the SteelStacks project. For ArtsQuest, the beneficial interest rates and terms of the NMTC loan made possible a mission-driven project that might not have been feasible under any other financing structure, and will allow them to have equity in the project after seven years.

The SteelStacks project will results in a $31 million, 60,000-square-foot Performing Arts Center that will feature two art cinemas, a meeting space for community functions and education, and a 450-seat venue that combines dining and entertainment.

 It takes many parties to finance a project of this size. Our financing partners were Commonwealth Cornerstone Group and US Bancorp (also the investor). The project is a win for all involved. Most importantly, for the community in Bethlehem it will supply much-needed community space, arts programming, and local jobs.